Co-ops bid to save United Milk

URGENT talks are under way in a bid to save United Milk after the dairy processing company called in the receivers.

Three milk-buying cooperatives are working together to try to keep the £40m processing plant in farmers‘ hands.

Receiver PriceWaterhouseCoopers went in on Tuesday (19 August) after United Milk‘s banker, HBOS, apparently refused to sign any more cheques.

Farmers who invested in the £40m butter and milk powder processing plant face losses running into millions of Pounds.

Dairy Farmers of Britain said it was working with First Milk and Milk Link to secure the future of the factory at Westbury, Wiltshire.

“We are now in active discussions with the appointed receivers,” said a Dairy Farmers of Britain statement.

“We will also be in dialogue with United Milk‘s suppliers who will be an integral part of the sustainability of the plant in the future.”

Details of the rescue plan are still to be finalised.

But it will probably involve the formation of a new company jointly owned by Dairy Farmers of Britain, First Milk and Milk Link.

The three co-operatives have been eyeing the business for some months, but no offers have been forthcoming.

United Milk is Britain‘s biggest dairy processing plant, with a capacity of 2.4 million litres per day.

It employs about 125 people and has an annual turnover of £100 million.

PriceWaterhouseCoopers said it will be paying 18p/litre for milk delivered to the firm‘s processing plant on a weekly basis.

Westbury provided a valuable processor, especially during peak milk production.

It is estimated to have added £40m to farmers milk cheques in April-June this year.

Pundits believe a bid from a rival processor is unlikely but David Lattimore, managing director direct supplies at Dairy Crest, didn‘t rule it out.

“If the price was right any business opportunity would have to be considered.”

The National Farmers‘ Union expressed shock at the announcement that United Milk had placed its business into the hands of receivers.

NFU president Ben Gill said the situation was of particular concern to milk producers who regarded the company as a major asset to the dairy sector.

“This situation is deeply regrettable for all those involved,” he said.

“It is clearly important that an adequate supply of milk is now provided for the company going forward.

“I can assure producers that the NFU is in contact with all of the major parties involved and will be doing everything possible to secure the best outcome for dairy farmers.”

It is believed that a failure to obtain and ensure a sufficient supply of milk to cover costs at the plant was a major factor in United Milk‘s failure.

Mr Gill said he understood that PriceWaterhouseCooper‘s primary objective for the immediate future was to keep the plant open.

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